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Query for composition dealer

161 views 2 replies

Arunendra Singh

1 Points Posted on 10 March 2019

A computer hardware dealer is registered under composition scheme since July,2017.

Due to lack of knowledge, he continued to issue tax invoices, and collected OUTPUT GST ON SALES.(which were made to registered dealers including nationalized banks)

While making purchases, he also paid Input GST.

1. How to manage Input and Output tax collected?

2. Whether there is any interest or penalty payable on such default?

Replies (2)

Any tax collected will have to be paid to the government. Ideally he should have paid only 1% of his TO but in this case since he has collected higher tax, it should be paid to the government. Reg ITC, it will not be available to him since he is a composition dealer.

Since he is not eligible to collect tax GST he can be penalised but if he voluntarily pays the collected amount, a lenient view may be taken by the Dept.

pritesh

CA Final student

7106 Points Posted on 11 March 2019

he can REFUND that tax amount to customer or deposit that tax to govt which he has collected by mistake.

and he is not eligible to claim itc for purchase because he is registered in composition scheme